6 Proven Strategies for Organizations to Achieve Labor Cost Reduction

If your company, like many, is preparing for a potential global recession, it’s likely that you’re closely scrutinizing your annual budget and seeking ways to cut costs. Labor costs represent a significant portion of this budget, making it one of the first areas to consider for reductions.

However, today’s tight labor market and the growing skills gap make hiring qualified candidates and improving retention rates critical priorities. To achieve continued success, you must ensure you have sufficient human resources to maintain output while also attracting and retaining the right talent. This balancing act can make cutting costs challenging.

At first glance, partnering with an HR solutions provider might seem like an unnecessary expense. However, this type of collaboration can actually help your organization reduce workforce spending while enhancing the quality of hire and retention rates.

In-depth Business Insights for Cost Savings

To maximize cost savings and achieve financial efficiency, a comprehensive understanding of your company’s current position is essential.

AOHR delivers these insights through an extensive business scan, managed by dedicated workforce analysts who collaborate closely with stakeholders from various areas including management, training, operations, HR, and finance. This holistic approach helps to create a clear picture of your current status, future goals, and the steps needed to achieve them.

Expert Workforce Analysis

Our experienced professionals, assigned specifically to your business, assist in gaining a deeper understanding of your workforce operations by addressing critical questions such as:

  • Key Business Objectives: Are you aiming to increase revenue, reduce costs, or both?
  • Workforce Alignment: How do these objectives integrate with your workforce?
  • Recruitment Process: What are the steps in finding and selecting candidates, and what are the associated costs?
  • New-Hire Activities: What is your spending on induction, onboarding, and training?
  • Workforce Planning: How do you determine the number of people needed?
  • Absenteeism and Turnover Costs: What expenses arise from absenteeism and staff turnover?

By addressing these questions, AOHR helps you identify areas for cost savings and operational improvements, ensuring your company is financially efficient and poised for future success.

Cutting Labour Costs Without Losing Productivity

Understanding the current status of your business, known as your zero measurement, allows us to identify the most effective actions to drive efficiency and save costs.

Improve Onboarding to Cut Labour Costs

One of the most effective ways AOHR helps companies cut labour costs is by improving the onboarding process. Effective onboarding is crucial for ensuring new staff members are comfortable in the workplace and can quickly reach high productivity levels. An optimized onboarding program can also enhance your employee retention rate. According to one study, 7 out of 10 workers are more likely to stay with a company for at least 3 years after experiencing a strong onboarding process.

Cost-Effective Onboarding for Contingent Workers

If your organization frequently relies on contingent workers, regular onboarding can be very expensive. Regardless of the number of new hires you onboard each year, it’s essential to do it cost-effectively.

Efficiency Through Technology and Innovation

AOHR expertise in this area ensures that our Inhouse Services division can take over your onboarding process and make it more efficient. This is achieved by deploying the latest technologies and innovations, such as remote onboarding solutions. These tools can help you save time and make the best use of your resources.

Enhance Training Programs for Better Results

Beyond onboarding, training is another area where large businesses can find opportunities to improve. Studies suggest that companies in the United States spend an average of £1,530 per employee on training and development programs each year. Regardless of how much your organization spends on training new hires, it is crucial to evaluate the effectiveness of your current training programs.

By partnering with AOHR, you can ensure that both your onboarding and training processes are optimized for maximum efficiency and cost savings.

Key Takeaways:

  • Improve onboarding processes to enhance productivity and retention
  • Utilize cost-effective strategies for onboarding contingent workers
  • Deploy the latest technologies for efficient onboarding
  • Evaluate and enhance training programs for better outcomes

Overtraining is a common issue many companies face, leading to wasted time and resources. It’s crucial to ask yourself, “Is the company spending unnecessarily on training employees with skills that aren’t essential for their roles? Or is there a strategic advantage in having employees trained in multiple tasks for added flexibility?”

AOHR can assess your current onboarding training process and determine its effectiveness. Our highly experienced team will help you identify inefficiencies in your training program and develop a strategy to enhance your onboarding process, ensuring optimal resource utilization and employee readiness

Extensive Recruitment Experience

In today’s dynamic job market, many organizations face rising employee turnover rates. According to AOHR’s Work monitor 2024, 60% of workers would reject a job that threatens their work-life balance, and around 24% would quit a job that lacks adequate learning and development (L&D) opportunities. Additionally, the cost of a bad hire can reach up to 30% of the position’s first-year earnings.

Reducing turnover starts with hiring candidates who possess the right skills, experience, and cultural fit from the outset. This process can be challenging, but AOHR, in collaboration with AOHR Inhouse Services, offers a solution.

Our vast network of pre-screened candidates allows our recruiters to quickly find individuals with the necessary skills, experience, and attributes. Leveraging our extensive recruitment and workforce management experience, combined with robust talent insights, we understand workers’ expectations and can build effective strategies to attract top talent. We also utilize cutting-edge technology, such as automated candidate screening and virtual interviews, to match the right candidates to the right employers efficiently.

Partnering with AOHR can enhance your quality of hire and boost retention, ultimately reducing costs associated with recruiting, onboarding, and training.

Reduce Direct Recruitment Costs

Reduce direct recruitment costs with AOHR’ HR solutions. Our inhouse services deliver immediate cost savings by reducing the time and money spent on attracting the right applicants.

One significant benefit is the reduction in financial commitments for marketing and advertising roles on job boards, social media, and other platforms. Many companies feel the need to advertise vacancies on multiple channels, which can be costly and doesn’t always guarantee reaching the ideal candidates.

Recruitment involves more than just advertising. Screening candidates, conducting interviews, checking references, and onboarding are all time-consuming tasks. An HR solution partner like AOHR can manage many or all of these tasks for you. With our inhouse services, you have an experienced talent management professional onsite to handle the daily management of your contingent workforce.

Our solutions help reduce your overall recruitment spend and free up your team to focus on tasks that generate more value for your business. By outsourcing recruitment tasks to our professional team, your workers can concentrate on more critical business activities.

Optimize your recruitment process and reduce costs with AOHR expert HR solutions.

Enhancing Recruitment Efficiency with Technology and Human Insight

AOHR understands the vital role of tech innovation in transforming HR processes. By adopting advanced systems and technologies, businesses can optimize their hiring and workforce management, achieving significant improvements. At AOHR, we leverage cutting-edge technology to provide faster, more efficient services that yield exceptional hiring results. Partnering with us means benefiting from tools designed to streamline the recruitment process.

Cost efficiency is another critical benefit. Implementing methods like electronic invoicing and automating key tasks—such as applicant screening, reference checking, and workforce analytics—frees up your human staff to focus on more strategic tasks. These automated processes also reduce the risk of human error, leading to potential financial savings.

While technology is a powerful asset in the recruitment industry, we recognize the irreplaceable value of human connections. At AOHR, candidate engagement is a top priority. By connecting with applicants at every stage of the recruitment process, we enhance new hire job satisfaction, quality of hire, and retention rates. This optimal blend of technology and personal touch helps our clients reduce labor costs while improving hiring outcomes

Achieve Greater Workforce Flexibility

In today’s dynamic business environment, factors such as fluctuating markets and seasonal trends necessitate the need for organizations to scale their workforce up and down efficiently. This variability can make labor cost management incredibly challenging.

One of the most effective strategies to handle these shifting demands is to build a flexible workforce by maintaining a team of contingent workers. This approach enables you to create a pool of temporary workers that can be called in as needed to scale up your workforce. Ensuring the right number of workers are available for all shifts makes it easier to meet delivery deadlines and customer expectations.

Since contingent workers are not on your permanent payroll, there is no need to retain extra employees during slower periods. Instead, you can scale down your workforce and save on labor costs. However, managing a contingent workforce can be both costly and time-consuming unless you collaborate with a talent solutions company to handle these tasks for you.

With AOHR expertise, your dedicated team can manage all aspects of contingent worker administration, including hiring, onboarding, and shift scheduling. Our comprehensive services allow you to reduce overall labor costs without utilizing more of your company resources or sacrificing quality.

Proven Workforce Solutions

Achieve unmatched results with AOHR recruitment and workforce management solutions. Our comprehensive approach focuses on understanding the workforce and identifying opportunities to minimize costs while maintaining productivity, benefiting businesses across various industries.

With over 15+ years of experience, our expert teams have delivered top-quality recruitment and workforce management solutions to organizations globally. Currently, we are collaborating with more than 200 clients on cost savings programs, helping them achieve reductions of at least 2% to 3% in their total workforce spend.

Partner with AOHR and gain instant access to our specialized expertise and skilled recruitment and workforce management teams. Additionally, we provide accurate, up-to-date talent insights to help employers better understand workers’ expectations and compare current salary and benefit offerings with industry standards.

Key Benefits:

  • Proven cost-saving strategies
  • Expertise in recruitment and workforce management
  • Comprehensive talent insights and industry standards comparison

Transform your workforce management with AOHR and drive your business success.